What is a Sec­tion 32 State­ment?

One of the most over­looked but un­der­es­ti­mated parts of the pur­chas­ing process in real es­tate is the Sec­tion 32 State­ment.

New home own­ers have of­ten never heard of one, or blindly sign the con­tract of sale with­out giv­ing the Sec­tion 32 a proper look-over. But whether you are buy­ing a home in the city or ru­ral prop­erty, you will at some point come face to face with a Sec­tion 32 State­ment. Get your head around this piece of leg­is­la­tion to make sure your in­vest­ment in a prop­erty doesn’t re­sult in any nasty sur­prises.

Why does a Sec­tion 32 State­ment ex­ist?

As part of the Sale of Land Act, a Sec­tion 32 State­ment is in­tended to pro­vide a pur­chaser with rel­e­vant in­for­ma­tion that may af­fect their de­ci­sion to sign a con­tract of sale.

It is im­por­tant to re­mem­ber that a Sec­tion 32 State­ment is not a con­tract of sale. Peo­ple some­times con­fuse these two, but they are sep­a­rate to each other and the sign­ing of a con­tract of sale is de­pen­dent on a Sec­tion 32 hav­ing been al­ready pro­vided.

When does a buyer re­ceive a Sec­tion 32?

Be­fore a con­tract of sale is signed. A ven­dor’s lawyer will of­ten pro­vide their real es­tate agent with the Sec­tion 32 State­ment, who will in turn pro­vide it to any po­ten­tial buy­ers and their lawyer.

The only sig­na­ture that needs to be on it is the ven­dor’s, how­ever, a real es­tate agent may in­sist that a po­ten­tial buyer signs the state­ment as proof of the agent’s role in pro­vid­ing the state­ment to any po­ten­tial buy­ers.

Note: in some cases, a sale of con­tract will state that the le­git­i­macy of the con­tract is de­pended on the sub­se­quent ap­proval of a Sec­tion 32 State­ment. In this case, the con­tract of sale is com­pro­mised and a buyer has the free­dom to can­cel their con­tract.

What is in­side a Sec­tion 32 State­ment and what should you look out for?

Be­fore you go pe­rus­ing this some­times-com­pli­cated piece of leg­is­la­tion, seek the ad­vice of your lawyer. They will have ex­pe­ri­ence in how to read a Sec­tion 32 State­ment and how to ap­proach the process. Your lawyer can help you iden­tify what is in­side the state­ment, how ac­cu­rate it is, and most im­por­tantly: what is miss­ing?

A Sec­tion 32 will of­ten in­clude:

1. Ven­dor’s de­tails

2. De­tails of the ti­tle. This is a very im­por­tant part of the state­ment and re­quires your at­ten­tion.

Note: check the mea­sure­ments of the prop­erty within the ti­tle vs. what you think you are buy­ing. If it is a sub­di­vided prop­erty es­pe­cially, are you get­ting what you think you are? 3. In­for­ma­tion re­gard­ing build­ing per­mits for re­cent ren­o­va­tions to the prop­erty.

Note: if there have been ren­o­va­tions and per­mits and in­sur­ance in­for­ma­tion is not in­cluded in the Sec­tion 32 then ask your­self, why not?

4. Zon­ing in­for­ma­tion. Be sure that you are aware of whether it is a com­mer­cial or res­i­den­tial zone and what sort of res­i­den­tial zone it is.

5. No­tices of any up­com­ing works or

or­ders is­sued by author­i­ties. This is im­por­tant in case of changes to the area that may af­fect you.

6. Out­go­ings: these can in­clude rates and body cor­po­rate/strata fees.

7. Ease­ments: these are ar­eas of your land that some­one else has the right to use for a spe­cific pur­pose, even if they aren’t the landowner. This is most com­mon in the form of drainage. Be aware of these ease­ments as they may af­fect/ com­pro­mise any ren­o­va­tions you have planned.

Things to re­mem­ber

Con­duct­ing a pri­vate sale? As the ven­dor, you still need to pro­vide a Sec­tion 32 State­ment. Have your lawyer com­pile this for you to pro­vide to ei­ther the po­ten­tial buyer or their lawyer.

If a Sec­tion 32 State­ment con­tains in­cor­rect in­for­ma­tion, this can al­low a buyer to with­draw from the sale of the prop­erty and can even re­sult in le­gal ac­tion.